first lien mortgage investments for self-directed IRA
would a first lien mortgage investment that is 60% of the appraised value be a good alternative investment? it pays 12% for 24 months and then it has a balloon balance due.
Ray
would a first lien mortgage investment that is 60% of the appraised value be a good alternative investment? it pays 12% for 24 months and then it has a balloon balance due.
Ray
Permalink Submitted by mk foss on Tue, 2009-02-03 03:09
I think the issue is whether or not there would be any operational problems with the IRA.
The borrower could not be affiliated with the IRA owner or else you could have prohibited transaction/self-dealing issues.
Also, you would need to find a custodian that would handle this asset because only a corporate trustee can ultimately be in charge.
Permalink Submitted by Daniel Liddle on Tue, 2009-02-03 03:10
Sounds like a sound deal to me. What sort of property is it??? About three years ago I purchased a $20,000 note from the bank for $4,000 plus back taxes for $6,000 plus attorney and title for about $1,000. Unfortunately this guy kept running around Miami and I couldn’t find him. I paid a pro $100 to do a skip trace and had a new address. I wrote him and said I didn’t want to foreclose-but please call. In a few days he called. I proposed to pay him $1,000 to give me a deed in lieu-just sign it over. This took a couple months and now my FISERV ROTH IRA has a new property!! Unfortunately there is another $5,000 of back taxes due and I’m getting a new survey done this week for $2,500 for a grand total of about $20,000 in the project- 36 acres of bare land. Since this all started everything has changed in that there is a natural gas Marcellus Shale “rush” coming at us. This may be a disappointment or??? Six weeks ago a couple offered $100,000 but backed off in a couple days. One mile up the road 268 bare acres sold three months ago for $1,4000,000!! That means my property could be worth about $190,000. It might be better to WAIT to not sell but lease to a gas company and hope they might drill??? All in all very pleased with this adventure.